LONDON – Petrobras faces a difficult short-term future, according to research and consulting firm GlobalData.
Adrian Lara, senior upstream analyst for the Americas, says presalt fields will contribute an estimated 65% of Brazil’s oil production by 2020, with 11.6 Bbbl of recoverable reserves to be added from planned presalt projects.
However, this production depends on timely deployment of FPSOs, the number of wells drilled, and productivity of the presalt wells. The fact that Petrobras is more than $100 billion in debt, Lara said, could put the brakes on activity.
The company’s capital investment and production forecast has been impacted by fraud allegations arising from Brazil’s “carwash” corruption scandal. It has therefore been forced to delay its development plans and has proposed budget cuts for the next two years.
Petrobras’ recently revised plan envisages 2.8 MMb/d by 2020, and will be adjusted further, with recent statements from the board indicating lower capex and a larger divestment strategy.
One major change in the company’s investment plan for presalt production has been a significant reduction in the number of FPSOs coming online by 2019.
“Developing presalt assets remains vital in providing much-needed cash flow for Petrobras. However, most of these require significant additional investment, which will be hard to find considering the company’s current position,” Lara explained.
Although Petrobras is opposed to partnering with other operators in developing Brazil’s presalt resources, recent statements from congress and the ministry of finance suggest a possible re-think.
Such a move would draw opposition from Brazil’s unions, Lara added, and would require substantial negotiation between key political parties. “However, this might be the necessary trade-off to create the potential production growth from presalt areas.”
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